The Government of Ontario has unveiled details about its plan to create an arms-length organization to administer the Ontario Retirement Pension Plan (ORPP).
The provincial budget says the ORPP Administration Corporation (ORPP AC) will be responsible for administering the plan and investing contributions.
It will have an independent board of directors with between nine and 15 members.
Read: What you need to know about the ORPP
The budget notes that ORPP contributions and investment funds will be held in trust for ORPP beneficiaries and will not form part of general government revenues.
“In my opinion, they’re on the right track for the governance structure for it, which is encouraging,” says Paul Forestell, Mercer’s national retirement leader.
To support the ORPP’s governance framework, the government will put in place an interim board to oversee the implementation process.
If the legislation passes, the province expects to name an interim chair for the ORPP AC in the coming months.
Read: ORPP consultation paper released
The budget didn’t disclose details on the ORPP plan design and the government says it’s still considering feedback from its recent consultations.
“It’s too big of an issue for them to have figured it out by now because the consultation didn’t close until recently so it’s not surprising,” says Ian Edelist, a principal with Eckler and its pension practice leader.
The government plans to announce its conclusions on the three key ORPP design questions mentioned in its consultation paper “shortly.”
He notes there are a lot of decisions to be made between now and the proposed ORPP start date of Jan. 1, 2017 and says it’s hard to imagine the ORPP will be ready on time.
What the budget missed
The consultants believe there are items the government still needs to address that were missing in the budget.
Forestell says the government could do more to address the funding regime for private plans.
“It didn’t disappoint me because I had no expectation of that being in there but I still feel they need to do more to support private sector plans,” he explains.
Edelist believes the government’s preoccupation with the ORPP is preventing the industry from introducing other plan designs.
“There’s no new information about target-benefit plans,” he says. “It’s a real shame that they’re falling behind on moving ahead.”
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